GDP in first quarter 2010 grows by 3.4 per cent

The gross domestic product for the first three months of this year increased by 3.4 per cent in real terms over the same period last year, the National Statistics Office said yesterday. GDP for this period amounted to €1,416.9 million.

This GDP increase represents the second consecutive quarterly growth registered after Malta exited the recession last year. In the last quarter of 2009 the economy grew by 2.4 per cent.

Finance Minister Tonio Fenech welcomed the latest figures saying they were a clear sign that the recession in Malta was over.

Mr Fenech told The Times Business: "These figures are encouraging especially when one considers how certain other European economies are performing. It is clear that the recession in Malta is over and that is good news.

"Growth was registered in nearly all sectors of the economy and what is especially welcome is the fact that the manufacturing sector registered its highest value added in five quarters. Our approach in helping industry deal with the effects of the global economic crisis has paid off," Mr Fenech said.

Mr Fenech, however, added a word of caution saying the international situation is still uncertain and one had to continuously work at encouraging investment into Malta.

"We have to continue working at fiscal consolidation, monitor closely what is happening internationally, especially in certain southern European countries and continue to make Malta attractive for investment," he said.

The NSO said that during the period under review, growth in value added was primarily generated by two sectors, financial intermediation and community, social and personal service activities.

Increases were also registered in education, health, hotels and restaurants, real estate, renting and business activities, public administration and wholesale and retail trade. The manufacturing sector registered its highest value added in five quarters.

Declines in value added were observed in transport, storage and communication, construction, mining and quarrying, and electricity, gas and water supply.

Total final consumption expenditure in real terms decreased by 0.2 per cent. Gross fixed capital formation at constant prices declined by five per cent. Real exports and real imports experienced increases.

The change in GDP at current prices, amounting to €92.6 million, is estimated to have been distributed into a €3.5 million decline in compensation of employees, a €61.2 million rise in gross operating surplus of enterprises, and a €34.9 million increase in net taxation on production and imports.

Considering the effects of income and taxation paid and received by residents to and from the rest of the world, gross national income at market prices for the first quarter this year is estimated at €1,364.2 million.